Six Sigma for Leaders

by Pete Pande

The nature of the debate surrounding Six Sigma presents an opportunity to better understand how value can be offered to improve the caliber of leadership in an organization.

It’s been more than 10 years since GE’s aggressive adoption of Six Sigma launched a renaissance of quality methods, and some 20 years since Motorola first began minting Black Belts and concentrating on defects. And yet, despite hundreds of documented successes and thousands of committed Six Sigma practitioners, criticism of and skepticism about Six Sigma remains as strong, and probably stronger, than ever.

One recent, visible example: when Bob Nardelli departed as head of Home Depot, anti-Sigma voices quickly proclaimed that his downfall showed the failure of Six Sigma. On a daily basis, you can find dozens of articles and blogs proclaiming that rather than promoting improvement Six Sigma serves to squelch innovation and creativity.

Even if one shares in the skepticism about Six Sigma, it could be suggested that the arguments pro and con warrant attention from those in the quality field. And that the nature of the debate presents an opportunity to better understand how value can be offered not just to improve processes and products, but to improve the caliber of leadership in an organization.

How the Real World Hears the Argument

It is important not to over-simplify the message of Six Sigma concepts. Even if management and executives buy into and have enthusiasm for many ideas of Six Sigma, the door is often left open for some legitimate doubts. Here are examples of a few Six Sigma sacred cows and how they often come across to those who spend their days running businesses and departments:

Measurement and Management by Fact

Most managers and leaders agree that they need more—or at least better—metrics, and would be better off using data more consistently in their diagnosis and decision-making. But for plenty of critical decisions, most leaders recognize that the uncertainties they have to cope with are not likely to be eliminated, at least in the short-term, by improved measures. This is especially true of the strategic choices that most influence the future of a business. Management can be improved by better measures, but always requires some element of “gut.”

Focus on the Customer

Six Sigma has helped many organizations (re)connect with customers and better align products and services to their needs. At the same time, smart businesspeople know when to, in a sense, ignore the customer. A laser-like attention to satisfying today’s customers can, in fact, lead a company into trouble—an oft-cited example being Motorola’s focus on high-quality analog cell phones.

It’s All About Process

Many have said: “It’s not the people, it’s the process.” But sometimes it is the people.

One of the best ways to show that Six Sigma does not work (or any other approach, for that matter) is to define it narrowly—for example, “it’s only about defect reduction”—and then provide examples where it does not apply. That’s what happens when an organization fails to account for the diversity of challenges that face businesses and leaders. Six Sigma principles and methods can be applied to a broader array of issues, and can have real relevance to leaders facing an increasingly complex environment. But first, the real nature of why simple answers do not work has to be understood.

The Paradoxes of Business Success

If one listens carefully to the arguments for and against Six Sigma or, more broadly, to debates over how to achieve success in business, it will be found that there is no single right answer. In fact, there are usually at least two—often seemingly contradictory—right answers. These can be called paradoxes, perhaps not technically correct, but pretty close.

Some of these paradoxes have already been touched on: facts and intuition are critical; processes and people count; love the customer, but beware of the customer. There are others: speed should be balanced with deliberateness; teamwork is key, but individual initiative is an essential catalyst; asking for buy-in works for many people, but a smart leader knows when to enforce compliance. Each is right, and wrong, depending on the circumstance.

Another critical paradox involves change itself. Proactive organizations and leaders are continually trying to improve their performance and stay ahead in the race to compete. But ironically the push for change can be self-defeating. Here’s the classic problem described by a key manager: “The tendency right now is to do everything. Leadership is getting frustrated because they’ve been trying to fix things for five years or so and instead of getting better, things seem to be getting worse.” One of the most valuable steps to achieving greater change return on investment is to stop changing so much.

Applying Six Sigma to Leadership

Like anyone, leaders fall victim to their own habits and preferences—when what they need is the ability to adapt to each new situation and embrace the reality of the paradoxes. Particularly as the pace of change accelerates, leaders need to work even smarter than ever—and cannot rely on past experience or charisma to ensure future success.

With that in mind, Six Sigma approaches can best support effective leadership by emphasizing the themes of balance and flexibility. In other words, the benefit of Six Sigma discipline should not be limited to, for example, better data, but rather to helping leaders gain a clearer understanding of when more data is critical. Or when a decision by necessity is based more on intuition than facts, they need help to manage risks and/or more effectively test their hypotheses by applying facts after the decision.

This means changing the game and broadening the scope of many Six Sigma initiatives—though for some of the most successful efforts the gap will be much narrower. It may be necessary to adjust an organization’s working definition of Six Sigma—or even rebrand its efforts. But first, if one is up to the challenge, leaders will have to be engaged with differently to demonstrate how one’s support can help them beyond the confines of the Six Sigma program.

Some tips on where to start:

Position change as an investment

Rather than just picking the next DMAIC (define, measure, analyze, improve and control), lean or Design for Six Sigma projects, leaders should be engaged in a discussion around how the broader portfolio of change initiatives are selected and managed. They should be encourage to do less and establish guidelines to ensure a more balanced set of investments, for example,, a conscious mix of quick hits, mid-range and long-range initiatives.

Acknowledge/market the paradoxes

A more credible view of how Six Sigma can help a business should acknowledge both where the core principles fit, and where they don’t. As an example, if a project team had to forge ahead without solid Voice of the Customer (VOC) input, one should not be too quick to see that as a failure, but rather a business choice—the validity of which can be assessed over time. Getting comfortable with the boundaries and trade offs does not mean excusing laziness or lack of discipline. Instead, it puts an organization in a position to better understand where and when to push harder— for example, invest time and money to get more VOC data—and when to manage the risks on the back end.

Encourage Hypotheses

One of the biggest complaints about Six Sigma—particularly from leaders—is that, “we already know (or knew) the answer.” In reality, however, no answer or solution is a 100% certainty. One can actually help leaders—without telling them they are wrong—by reminding them that their answers are really educated guesses. Just that subtle shift in perspective opens the door to greater discipline and flexibility. Reticent leaders can feel encouraged to act as long as they can manage the unknowns. Confident ones may be willing to apply more care rather than simply assume their answers are correct.

Love it or hate it, Six Sigma is the closest we’ve come to bringing quality thinking into the realm of leadership since Deming’s challenging 14 points. Naysayers can continue to marginalize and undermine the gains made so far. It is much better to recognize the aspects of Six Sigma that can be applied to the real challenges of leadership—and build on the successes achieved during the past 20 years.

Tech Tips

# Awareness of the paradoxes of business can help leaders work smarter.

# Six Sigma approaches can best support effective leadership by emphasizing the themes of balance and flexibility.

# An organization may need to broaden the scope of its Six Sigma initiative to see positive results.